Greek betting and lottery operator OPAP saw profits fall nearly one-fifth in 2016 thanks to the government taking a bigger tax bite.
OPAP released its annual report on Wednesday, which showed Q4 and FY16 gross gaming revenue largely unchanged from the same periods one year earlier, but full-year earnings fell 18.4% to €307.5m and net profit tumbled 19.2% to €170.2m.
The chief culprit behind the profit plunge was (surprise!) the Greek government, which raised OPAP’s tax obligation from 30% to 35% of gross gaming revenue. OPAP says the increase, which was applied retroactively to January 1, 2016, cost the company an extra €57.5m last year.
OPAP’s sports betting operations saw revenue fall 3.6% to €397.2m last year, although the company took heart by the fact that the Q4 figure was up 3.2% year-on-year, which OPAP credited to “efficient payout management.”
OPAP’s mainstay lottery division reported revenue up 1.4% to €841.3m last year, despite the Q4 numbers falling 3% due to fewer jackpot rollovers in its Joker product and unfavorable comparisons with a gonzo performance by its KINO Bonus product in Q4 2015.
The Instant & Passives division reported essentially flat revenue of €159m, although the division closed out the year having posted modestly positive growth for two consecutive quarters.
OPAP CEO Damian Cope said the company had managed to pull off a “solid’ performance despite the increased tax burden and Greece’s ongoing economic uncertainty. Cope said he was pleased with the progress OPAP had made on the strategic vision he outlined shortly after being named CEO last May.
OPAP signed a flurry of technology partnerships in February, including a new digital sportsbook platform deal with Betgenius. OPAP is expected to begin migrating its online sports betting operations to the new platform later this year.
OPAP also reached agreement this month with 90% of OPAP’s agents regarding a new commission scheme based on net gaming revenue. OPAP says the new arrangement will allow its sports betting product to be more competitive.
This year saw OPAP commence the rollout of video lottery terminals (VLT) in the company’s new ‘Play’ Gaming Halls (pictured), four of which opened in January. As of March 29, there are 50 operational Play Gaming Halls which, along with 10 OPAP agencies, are hosting a total 1,274 VLTs.